By Erandhi Mendis, Social Impact Leader, Australia and New Zealand, Kyndryl
Australia finds itself at a sustainability crossroads. It’s clear that environmental concerns among businesses are rising, with close to half (45%) of Australian organisations acknowledging sustainability’s importance in Kyndryl’s recent Global Sustainability Barometer report. However, questions remain as to whether sustainability programs are the real deal for some local companies or whether they are a financial or a tick-box exercise. Reducing energy costs, reaching net-zero goals and employee recruitment are the top three motivators. What’s more, over half (56%) of businesses say investors are the driving force behind sustainability decisions, reinforcing the importance of optics for these organisations when it comes to ESG.
Is this because of a lack of clear direction or the ability to track progress? While debates on mandatory climate disclosures continue, it’s evident that businesses crave more robust support and regulatory frameworks to drive meaningful change. A staggering 88% of Australian businesses call for mandated reporting and over half (53%) want improved incentives for organisations.
Companies that are making progress are those leveraging the power of technology to establish actionable and measurable sustainability strategies. The good news is that many (72%) organisations see great significance in technology’s role to reach their goals. The bad news is that only 32% believe they are making full use of it in their organisation. Artificial intelligence (AI) has the potential to revolutionise sustainability efforts by assessing Scope 3 risks, predicting energy consumption, and even anticipating potential risks such as natural disasters.
The technology is readily available; the key lies in businesses investing in it with a genuine commitment to sustainability. So, how exactly can AI help?
AI and Data: The Game Changers
The AI revolution equips businesses with a powerful arsenal of technologies to analyse and generate valuable insights from data with immense speed and accuracy. When you think of AI, your mind may immediately go to automation. Sure, the technology primarily serves to automate sustainability reporting processes today. However, it can also be applied to assess the carbon footprint of IT estates — from cloud computing to data centre operations — to enable more sustainable platform choices and lower energy consumption.
That said, most corporate environment, social and governance (ESG) strategies are in need of an overhaul to reflect the evolving technological landscape. Currently only 13% of Australian organisations have prioritised incorporating data-driven sustainability goals into their corporate and transformation strategies. Data is like the bricks used to construct a house. You could say without data, AI – the architect – can’t design or build anything.
For example, effective assessment of IT environments, monitoring of ESG KPIs, detecting anomalies or even running AI simulations all requires timely and reliable data. Unfortunately, this data often resides in siloed systems and diverse formats. Ensuring access to high-quality, curated data is therefore critical.
Cracking the Code: Overcoming Challenges for AI in Sustainability
But it’s not just siloed or inaccurate data that can hinder progress. Availability of historical data or a common taxonomy for data classification also has an impact on the effectiveness of adoption and, in turn, benefits garnered from AI. Varied ESG initiatives also make it hard to prioritise and therefore be strategic with both adoption and measurement. Businesses need to ensure their AI implementation ladders up to and supports their overall ESG strategy. An important step in this involves identifying how AI-generated insights can inform and advance these initiatives. Simply deploying AI isn’t enough.
It all comes down to building a solid data foundation. Businesses need to build a trusted architecture for accurate data acquisition and analysis, from origin to utilisation. The advantage? Speed and agility. Companies with strong data foundations and sound data management practices can adapt quickly to evolving regulations, as well as shifting business and customer needs.
How all Australians Can Create Change for Good – With the Help of AI
AI can be a powerful tool for businesses to achieve sustainability goals, but employee engagement must be a tandem focus to ensure lasting success.
Australian employees are ardent sustainability supporters, with 59% the most vocal in advocating for sustainability practices. However, just 17% of employers acknowledge employee awareness of their organisation’s sustainability goals. This disconnect highlights the need for better education and empowering employees to become agents of positive change.
It is crucial employers go beyond education and awareness-raising efforts to empower employees to actively contribute to reaching sustainability objectives, and have measures in place to quantify the positive impact driven by their workforce. This is where data-driven dashboards track sustainability achievements come in handy. Only 15% of businesses provide employees with the tools to track their current sustainability goals and achievements in real-time. Dashboards with this information empower employees to become active participants in the sustainability journey, not just passive observers.
While a growing number of Australian businesses recognise sustainability’s importance, genuine commitment and action are crucial. Technology, particularly AI, offers a powerful solution. However, a data-driven approach and employee engagement are vital for success. By overcoming these challenges, building strong data foundations, and empowering employees, Australian organisations can leverage AI to achieve real environmental progress.
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